As of September 29, 2023, there's an impending concern about the U.S. Congress failing to finalize a spending agreement. Companies engaged in international trade are advised to brace for potential disruptions due to a possible Federal government shutdown beginning 12:01 am, October 1, 2023. This would significantly impact international trade practices, including agency closures and alterations, causing inevitable delays in trade-related administrative functions.
Key agencies overseeing trade activities might undergo partial or full closure from October 1st. While certain operations, like processing imports and conducting investigations, will persist, many tasks, including export license approvals, classification rulings, and trade remedy proceedings, are anticipated to pause during the shutdown.
U.S. Customs and Border Protection
The Department of Homeland Security's contingency blueprint assures that port entry and cargo security, overseen by U.S. Customs and Border Protection, remain undisturbed. However, certain functions, like auditing, policy setting, and training might experience a slowdown or halt. Reflecting on the 2019 shutdown, the review of Enforce and Protect Act allegations and trade fraud reports will likely continue. Still, other operations within Customs, including rulings and protests, may face significant delays. Furthermore, certain units, like Forced Labor Communications, might be impacted, affecting regulatory support for acts such as the Uyghur Forced Labor Prevention Act.
U.S. Department of Commerce
The Department of Commerce's contingency outline indicates that vital International Trade Administration actions, including trade policy discussions, will persist. Yet, many of its tasks will halt. Drawing from the 2019 shutdown, reduced staffing and resources were evident in the ITA and the Bureau of Industry and Security. Antidumping and Countervailing duty investigations, among other proceedings, are expected to face postponements. Companies might encounter delays accessing certain resources like the “ACCESS” database. Additionally, BIS's export licensing might experience hold-ups, although export enforcement investigations should continue. There's a possibility that the SNAP-R platform, used for export license submissions, may be non-functional or face lengthy processing times.
U.S. International Trade Commission
Recalling the 2019 shutdown, the U.S. International Trade Commission paused many investigative actions. Their 2022 plan indicates that some litigation-related tasks will remain. However, investigative functions, including certain proceedings and the upkeep of the U.S. Harmonized Tariff Schedule, will face disturbances.
U.S. Department of Treasury
The Department of Treasury's recently released contingency strategy clarifies that significant regulatory and enforcement actions will continue, but the Office of Foreign Assets Control might halt license processing and regulatory guidance.
U.S. Department of State
Given the national security emphasis of the U.S. Department of State, many of its roles will persist as per its contingency plan. However, entities like the Directorate of Defense Trade Controls might face substantial cutbacks, especially in areas like licensing and regulatory functions, though enforcement and criminal probes should remain unaffected.
Companies must also monitor the status of Partner Government Agencies, like the FDA and USDA. Delays in these agencies could lead to further clearance interruptions.
In light of these potential shutdown repercussions, businesses are advised to anticipate interruptions in their global supply chains and make appropriate contingency plans. We remain committed to updating the trade community with any further developments.
